Wounded Knee is a census-designated place (CDP) in Shannon County, South Dakota, United States. The population was 328 at the 2000 census. The town is named for the Wounded Knee Creek which runs through the region. The bones and heart of the Sioux chief Crazy Horse were reputedly buried along this creek by his family following his death in 1877. The town lies within the Pine Ridge Reservation, occupied by the Oglala Lakota (Sioux).